Business leaders say they still need to hear more detail from Rachel Reeves and from Sir Keir Starmer’s government ahead of the budget – despite their positive reaction to the Chancellor’s recent Labour conference speech.
At the conference in Liverpool, the Chancellor vowed to tackle the “£22bn black hole” left by the Conservative government, in partnership with the Prime Minister.
She vowed to bring: “A budget with real ambition. A budget to fix the foundations. A budget to deliver the change that we promise. A budget to rebuild Britain and my budget will keep our Manifesto commitments. Every choice we make will be within the framework of Economic and fiscal stability. You’d expect nothing less.”
And she added: “I believe in the Britain of opportunity, fairness and enterprise.” The chancellor claimed a budget that left “no return to austerity” as Labour advertised itself as being pro business and backing opportunity for all.
Ms Reeves said the government's long-term focus contrasted sharply Liz Truss's short-lived administration. She said: “Stability paired with reform will forge the conditions for businesses to invest and for consumers to spend with confidence. Growth is the challenge and investment is the solution. Investment in new industries, new technologies and new infrastructure.”
Among the subjects eagerly debated by business leaders at conference were the cap on corporation tax at its current level, the ban on exploitative zero-hour contracts, the end to ‘fire-and-rehire’ and the promise of “a minimum wage that takes into account the real cost of living”.
Though Liverpool’s conference was treated as an international summit for investors, with hundreds of lobbyists attending, the autumn budget of “real ambition” received wary glances from the audience following the repeated warnings since July’s elections of "tough times ahead".
Shevaun Haviland, , says the speech "set the scene for [Rachel Reeves'] first budget which will be a huge moment to shape the expectations of business and the public for the years ahead”
“Businesses will be keen to get more detail on how she plans to do this. They will want to know where any increases in the tax burden are likely to fall, but they will welcome the imminent publication of an industrial strategy.
“It’s also welcome that planning reform and grid connectivity are priorities for the government as they remain key blockers to business investment. But companies are now impatient to see delivery. All eyes will now be turning to October 30 to see if the Chancellor can deliver on the intent that she has set out today.”
Sir Keir's first speech included the railways coming back into public ownership, a “no stone left unturned” stance on tax evasion, and a response of “I get that” to answer rising anxiety of winter fuel allowance. The Prime Minister confirmed Aberdeen as the base of GB Energy, which Ns Haviland agreed was “fantastic news” for the business community in Scotland’s North East.
But the BCC director also recognised that firms would invest more “If they see a clear long-term plan for the economy". She added: “If next month’s budget and the launch of the industrial strategy are properly executed, they have the potential to be real catalysts for business growth.”
At the conference, Google’s Ƶ chief Debbie Weinstein was photographed shaking hands with Sir Keir as he invited businesses to “partner with us.”
MAKE Ƶ’s chief executive Stephen Phipson said more detail was needed from the government. He said: “For business to feel truly secure to make those longer-term investments, meat on the bones of the industrial strategy must be a priority which comes at speed."
Jonny Haseldine, Policy manager at the BCC, agrees with Mr Phipson. He said: “Businesses, both in the Ƶ and overseas, will be keen to see more detail on competitive planning and tax policies, in order to achieve much-needed growth.”
Ahead of the budget later this month, business leaders say they need to see a long-term outline for Ms Reeves’ strategy if Labour is to secure the support of the major leaders it desperately needs.
Chris Hayward, policy chair of the City of London Corporation, said: “Tax is an important part of the equation: it’s no good being in sell mode then around the world people say: ‘Your tax rates are too high.’ The government cannot resolve that immediately but it can set out a pathway, a course of action that will get us to a globally competitive position on business taxes.”
Damayanti Chatterjee, senior economist at consultancy Public First, said: “The balance of power between Labour and British businesses has shifted; this time last year, Labour's conference was geared towards reassuring businesses with an array of eye-catching, market-friendly policy announcements and a consistent message of stability after years of political and policy churn. Now the party is in power, the focus is on delivery, and while the early mood music is positive, many of the business leaders who sought to woo Labour in Liverpool will have left with more questions than answers.
With the conference light on policy specifics, all eyes will be on the Bbudget in October; early rumblings that the Chancellor could relax her fiscal rules are likely to be received very positively. She will be under pressure to set out in more detail what Labour's economic plans mean in practice.
Businesses will be looking out for tax and business rates reform, skills investment and a reduction in the overall tax burden, alongside other measures that incentivise private capital.
She added: “The commitment to introducing stronger protections for workers in its first 100 days and supporting an active industrial strategy will have implications for businesses in the years to come. This October is a make-or-break moment for the new government to show businesses and investors that it has the tools to turn the Ƶ's economic fortunes around.”
